CN says it expects to deliver “solid double-digit” EPS growth over the $3.06 per share in adjusted earnings last year, while free cash flow should be between $1.8 billion and $2 billion, up from $1.6 billion to $1.7 billion in its prior forecast.

After a slow start hampered by extreme winter weather, the Montreal-based railway has moved about 5,500 carloads of grain weekly for the past two to three months as shipments in the quarter rose 70 per cent above the prior year.

The remaining waiting list represents only about one week of shipments from the Prairies, while grain vessel lineups at all ports are back to normal.

“As I speak today in the middle of July, our Canadian grain supply chain is fully back in sync,” CEO Claude Mongeau said Monday during a conference call to discuss the company’s results.

The railway expects to set a record for the year, ending nearly 25 per cent higher than average as of July 31, with a total of 18 million tonnes of the harvest expected to move this year, six million tonnes more than average.

“Add to this the new crop and the need to move it, we should be moving record volumes of grain well into the spring and even summer of next year,” he told analysts.

The country’s largest railway (TSX:CNR) beat expectations as its second-quarter profit increased 18 per cent to $847 million while revenues rose 17 per cent to a record of $3.12 billion.

The Montreal-based railway said adjusted profit amounted to $1.03 per diluted share, up from $717 million or 84 cents per diluted share on $2.67 billion in revenue a year ago.

The adjusted profit in the quarter ended June 30 was three cents above analyst forecasts.

Besides higher volumes, the results were helped by a weaker Canadian dollar and freight rate increases.

Revenue ton-miles grew by 14 per cent and carloadings increased 11 per cent.

“We’re very pleased that we’ve had a very swift recovery following what were tough winter conditions and we did exactly what our customers would expect in terms of getting those supply chains back in sync,” Mongeau said.

Revenues increased for grain and fertilizers (35 per cent), metals and minerals (20 per cent), intermodal (17 per cent), petroleum and chemicals (17 per cent) automotive (15 per cent), forest products (nine per cent) and coal (five per cent).

Asked if the increased volumes shipped will ease acrimony between the rail and grain industries, Mongeau said he hopes facts will be used by government to shape policy.

“We lost perspective in the winter with the grain situation,” Mongeau said of the government siding with the grain sector to set legislation ordering rail companies to double the amount of grain they moved each week to a minimum of one million tonnes and using 11,000 cars.

“We were hitting record volume last fall…The winter was very difficult but when you look at the entire winter at the end of it, with the strong March performance, we came in with volumes that were only two per cent less than an average winter and since then we are hitting absolute records.”

CN Rail’s operating ratio, which measures operating expenses as a percentage of revenues and where lower is better, improved to 59.6 per cent from 60.9 per cent a year earlier. That’s the best second-quarter result and third-lowest for any quarter.

In addition to grain, the railway saw growth in most categories of freight, including crude.

“There is solid demand pretty much across North America. We are growing faster than the economy — at mid- to high-single-digits growth,” added chief marketing officer Jean-Jacques Ruest.

Earlier in the day, CN’s shares hit an all-time high of $73.61, but closed down 13 cents to $72.95 on the Toronto Stock Exchange.

Calgary-based Canadian Pacific Railway (TSX:CP) said last week its net income rose 48 per cent to $371 million or $2.11 per share despite the lingering effects of a harsh winter.

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